Forging America: The Story of Bethlehem Steel

Chapter Six: Bethlehem goes to war

December 14, 2003|The Morning Call

Working with Bethlehem's banks, the U.S. government encouraged housing conversions. On May 3, 1943, the National Housing Agency for Properties announced it had arranged a lease with two property owners to provide space for war workers, the first of what agency officials hoped would be many more. The next day, Bethlehem's First National Bank and Trust Co. announced its "Remodeling for Victory" campaign, reminding property owners that "idle houses and rooms are slackers in this war." Owners could get loans to make conversions.

The big mansions of Bethlehem Steel's founders -- Robert Sayre's residence and the house where Robert Linderman and Charles Schwab had lived -- were divided into rooms and apartments.

But like the company's earlier luminaries, its chief executive during the 1940s lived in a large house and kept a regal presence.

In 1941 and 1942, Eugene Grace's annual pay was $537,724, the highest in the nation after Hollywood producer Louis B. Mayer, who made $697,048 in 1941. In April 1943, while announcing that The Steel's first-quarter earnings were only slightly higher than those for the same period in 1942, Grace said he was taking a 58.8 percent pay cut. That brought his total compensation for the year to about $221,600.

It was still a princely sum, and Grace was treated like a feudal baron. His comings and goings at the Bethlehem offices on Third Street were a finely orchestrated dance of precision and security.

A Bethlehem Steel police officer was perched on the building's roof, binoculars in hand. When he spotted Grace's motorcade, which consisted of Grace's chauffeur-driven car escorted by motorcycle policemen, a signal was buzzed to elevator operators in the headquarters building. The elevator attendants stopped at the nearest floor, and everyone got off and out of sight. The elevators descended to the granite-and-marble art deco lobby to await Grace's arrival. Emerging from his car, Grace would make his choice of elevator and ride up by himself.

As a result of rationing, Saucon Valley Country Club caddies had trouble getting to the golf course. Determined to play, Grace would have his chauffeur pick them up and drive them.

But if Grace was at times lordly, he was also respected, and at no time was that respect greater than during World War II. As the ultimate steel production man, he gave the country and its allies what they sorely needed: a rapid outpouring of steel in unprecedented quantities. The shortage that experts feared in 1941 never happened, thanks to the prodigious efforts of Bethlehem Steel and other producers.

Grace, who fought bitterly with Roosevelt over labor unions throughout the 1930s, cooperated with the administration on several fronts. At the president's urging, he served on the board of a program called the Controlled Materials Plan, the central clearinghouse for the allocation of steel. He developed a way to quickly assign priorities for civilian and military use of the metal.

In the labor arena, Grace and union leaders found common ground with the president in meetings at the White House. Philip Murray of the Steel Workers' Organizing Committee, soon to be the USW, agreed to no strikes. Grace and the presidents of the other major steel companies pledged not to lock out employees in the event of a dispute.

Though Murray tried to get 121/2-cent raises for workers at Bethlehem Steel and other "Little Steel" companies, the National War Labor Board limited the pay hikes to 51/2 cents in 1941. After that, wages were frozen for the duration of the war.

In his annual report to employees, Grace said the average hourly wages for all employees in 1943 was $1.30. Laborers, who made up a third of the work force, made significantly less. The top skilled workers, who represented 10 percent, got the highest pay. Grace said the average number of weekly hours for all employees was 45, but millworkers put in longer hours.

When they had free time, Bethlehem Steel employees with a few coins in their pockets went to the movies or live shows.

Castle Garden, the dance hall at Dorney Park, was a major attraction for big-band fans. On July 17, 1943, civilians could pay 75 cents and servicemen, 35 cents, to hear and dance to Ken Keely and his Royal Manhatters, whose chief draw, according to one local critic, was "the hottest drummer boy on the road." Castle Garden burned down in 1985.

Moviegoers in 1943 could spend a quarter to see "Destination Toyko," a submarine drama starring Cary Grant and John Garfield that was as "big as the broad Pacific, violent as a China Sea typhoon." George Raft, Sydney Greenstreet and Peter Lorre were toe to toe in the spy drama, "Background to Danger," in which "the Gestapo gets it from the G-men."

Lloyd Nolan charged up the beach in "Guadalcanal Diary," and Pat O'Brien, "a lovable fighting American," showed that both football and war could be hell in "The Iron Major."